PALO ALTO, U.S. -- Tesla has revealed a new battery to boost electric cars' power and range, saying the units will help to drive vehicle costs down to $25,000 within a few years.
The battery cell is larger than those Tesla buys from Japan's Panasonic and other suppliers and will be produced partly by the electric automaker itself -- a first for Tesla. The battery will provide six times more power and enable a 16% range increase for vehicles, the U.S. electric automaker said.
Tesla said it was not ending its relations with outside battery suppliers. Elon Musk, Tesla's CEO, said the company intends "to increase, not reduce" battery cell purchases from Panasonic, LG Chem, China's CATL and other manufacturers.
But Musk said the new 4680 battery cell would significantly reduce the cost of electric vehicles, thanks to higher efficiency and cheaper materials used.
"I think probably, like soon, about three years from now, we're confident we can make a very competent, very compelling, $25,000 electric vehicle that's also fully autonomous," said Musk.
At the moment Tesla's cheapest vehicle, the Model 3, starts from $37,990.
The plans were unveiled at Tesla's factory in Fremont, California factory during its annual "battery day" on Tuesday in the U.S., combining its annual shareholder meeting with updates on energy technology development.
"I want to stress, this is not just a concept or a rendering -- we're starting to ramp up manufacturing of these cells at our pilot production facility just around the corner [in Fremont]," said Drew Baglino, senior vice president of powertrain and energy engineering at Tesla.
The company also unveiled its latest vehicle: a new $140,000 version of its Model S that will have a 520-mile range between charges and accelerate to 60mph in under two seconds. The model will be available by the end of 2021, said Musk.
Musk said he expected vehicle deliveries to grow by 30% to 40% in 2020 in spite of disruption from the coronavirus pandemic. For FY 2019, Tesla delivered 367,500 vehicles, up 50% frrom the previous year.
"In 2019, we had 50% growth. And I think we'll do really pretty well in 2020 -- probably somewhere between 30 to 40% growth, despite a lot of very difficult circumstances," Musk said.
That would take the company close to or slightly over its previously stated goal of 500,000 deliveries this year.
The robust growth trajectory is in part thanks to its Shanghai factory, which was able to ramp up production quickly in past months, according to the company.
"I think we really could expect that to be, over time, a factory that produces over a million vehicles a year," said Musk.
The Shanghai plant is also important to Tesla's ambitions to grow in Asia. Tesla recently posted several Singapore-based job openings on LinkedIn, looking for senior developers, Bloomberg reported on Wednesday. The company started posting sales related positions in the city-state in July.
A factory in China enables the company to deliver vehicles more quickly and cheaply to nearby countries. "Having a factory in China, that serves China and many, many other countries in the region will be key to us at tightening that chain of cash flow," said Musk on Tuesday.
At the Tuesday meeting Japanese financier Hiro Mizuno, along with Musk and chairwoman Robyn Denholm, were re-elected to Tesla's board of directors for a three-year term.
Mizuno previously served as executive managing director and chief investment officer of Japan's $1.5 trillion Government Pension Investment Fund -- one of the world's largest institutional investors -- since January 2015.
"One of my priorities as an investment chief was to promote responsible investments, which aim to make financial returns, while pursuing ESG agenda, such as environmental and social issues," Mizuno said on Tuesday.
"This is why I was interested in Tesla, where our mission is to accelerate the world's transition to sustainable energy," he added.